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National minimum wage not the jobs poison pundits feared, says new Labour Minister

Minister of Employment and Labour Thulas Nxesi told reporters in Parliament on Wednesday that the employment market had taken well to the National Minimum Wage since it was signed into law, with only 7% of employers in the country not complying.

Nxesi was speaking ahead of his first Budget Vote as Employment and Labour Minister. President Cyril Ramaphosa signed the National Minimum Wage Bill into law in November last year, with the expectation that it would lift the income of millions of workers to above R3700 per month.

While instances of non-compliance have been on record and various employers have asked for exemptions from the wage, Nxesi said those who have flouted the National Minimum Wage or challenged it at the Commission for Conciliation Mediation and Arbitration are well within the minority.

"Inspections, to date, indicate a high compliance rate with only 7% of employers failing to pay the prescribed rate. Prophecies that wholesale retrenchments would follow the introduction of the National Minimum Wage have not borne out. An expected massive spike in CCMA cases has not occurred," said Nxesi.

Nxesi said non-compliant employers did not need to fear sanctions if they sought an exemption for their inability to honour the minimum wage.

"We don't want to make assumptions as to why employers don't comply with the National Minimum Wage. We will meet with them. We will not use a blanket approach. We have provisions for exemption, if they can prove transparently that they cannot meet the wage," Nxesi said.

Nxesi said his Budget Vote would prioritise employment and job creation, investment in skills development and social justice in the employment market.